TMI Blog2016 (4) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... all be available as CENVAT credit to the principal supplier of raw material. It is only for the convenience of the procedure, Notification 214/86 was issued and not to exempt any excise duty. Since the goods manufactured on jobwork basis is exempted on the ground that the excise duty is charged on the full value of final product wherein the value of jobwork goods deemed to have been included the jobwork goods is not exempted. Therefore, Rule 6(3)(b) which is applicable only on the clearance of exempted goods shall not apply in the case of the goods manufactured on jobwork basis under Notification 214/86 The issue involved in the present case has been decided in a number of cases and accordingly the demand raised for an amount equivalent to 10% of the value of jobwork goods in terms of Rule 6(3)(b) is not sustainable. - Decided in favour of assessee - Appeal No. E/740/07 - - - Dated:- 13-1-2016 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) For the Petitioner : Ms. Anjali Hirawat, Advocate For the Respondent : Shri Ajay Kumar, Jt. Commr (AR) ORDER PER: RAMESH NAIR This appeal is directed against order-in-original No. 42/MS (31)/Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Notification 214/86. Consequently provisions of payment of 10% of the value of such goods as provided under Rule 6(3)(b) has no application. She placed reliance on the following judgements:- (a) Hwashin Automotive India Pvt. Ltd. v. CCE - 2007 (218) ELT 703 (b) CCE v. Kapsons Inds. Ltd. - 2007 (218) ELT 460 (Tri. Del) (c) CCE vs. Jainsons Wool Chambers Ltd. - 2010 (261) ELT 1015 (Tri. Del) (d) Sterlite Industries (I) Ltd. v. CCE -2005 (183) ELT 353 (Tri.LB) (e) CCE v. Happy Forging Ltd. - 2011-TIOL-34-HC-P H-CX (f) Welspunn India Ltd. v. CCE - 2009 (248) ELT 898 (Tri. Ahmd.) 4. On other hand Shri Ajay Kumar, learned Jt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. We have carefully considered the submissions made by both the sides. 6. We find that the demand was raised for an amount equivalent to 10% of the value of the goods which was manufactured by the appellant on jobwork basis which was returned without payment of duty to the principal supplier of raw material in terms of Notification No.214/86. As per the condition of the Notification 214/86 principal supplier of raw mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such input was wholly exempted from the payment of duty of excise leviable thereon or was chargeable to nil rate of duty. It was observed that, in the special procedure laid down under Rule 57F(3), duty did not get paid at the job worker s end at the time of clearance of goods, but ultimately got paid at the principal manufacturer s end. In other words, assessable value of the goods cleared by the job worker without payment of duty to the principal manufacturer would ultimately become as ingredient of the assessable value of the final product cleared by the latter on payment of duty. Thus, duty gets paid on the job-worked goods at a later stage and, therefore, such goods cannot be categorized as exempted goods for purposes of Rule 57C or Rule 57R. Thus, the Larger Bench decision operates in favour of the respondents. In the circumstances we find that the appellants were not required to pay an amount of ₹ 63,68,953/- along with interest of ₹ 50,352/-. They were eligible for refund of the same. As these amounts do not represent duty, the refund of the same need not be subjected to the procedure prescribe under Section 11B of the Central Excise Act. It is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terfere the Order of the Commissioner. Accordingly, the appeal filed by the Revenue is dismissed. ( c) Jainsons Wool Chambers Ltd. 4. I have carefully considered the submissions from both the sides and perused the records. The dispute in this appeal is only for the period prior to 1-4-03 i.e. for the period from April-01 to March-03 when Rule 12B of the Central Excise Rules was not there. During this period, the respondent were receiving raw material from the principal manufacturers and were processing the same into woolen tops/woolen yarn by using their own inputs for which the Cenvat credit was being taken. The principal manufacturers were clearing the finished goods on payment of duty. The point of dispute is as to whether in such a situation, the respondent as job worker were eligible for Cenvat credit of inputs used in or in relation to the manufacture of goods on job work, which were cleared without payment of duty to the principal manufacturers who, in turn, cleared the same on payment of duty. I find that this issue stands settled against the Revenue by Larger Bench judgment of the Tribunal in the case of Sterlite Industries (I) Ltd. v. CCE, Pune (supra) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Law Ministry that the term exempted has a definite connotation. The same as attributed to the notification issued by the Central Government. Similarly, the chargeable to nil rate of duty would refer to the tariff rate being nil and the goods cleared in terms of provision of Rule 199BB would not be covered by the said expression inasmuch as the same are not chargeable to nil rate. In the present case, we find the job worker could have cleared the goods on payment of duty and manufacturer could have claimed credit of the same. It is only under the special procedure laid down in terms of the Rule 57F(3) that the duty does not get paid at the job workers end at the time of clearance of the goods, but ultimately gets paid at the manufacturers end. In these circumstances, we are in agreement with the decision rendered in the case of Bajaj Tempo and Jindal Polymers. 3. Apart from the above two decisions, we also note that identical view was taken in the case of Shakti Insulated Wires Ltd. v. CCE C, Mumbai-V [2002 (149) E.L.T. 668 (Tri.) = 2002 (51) RLT 115 (CEGAT-Mum)] also in the case of CCEx, Jaipur v. Noorani Textiles Mills [2000 (122) E.L.T. 744 (Tribunal)]. 4. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principal manufacturer, would not be hit by provision of Rule 57C. Inasmuch as, the matter stands decided by the Honourable Supreme Court, we would hold in favour of assessee. 5. As regards the decision in the case of Alpha Lavan laying down that the Modvat credit could be claimed in such a situation, we find the earlier decision of the Bajaj Auto was not followed. However, in view of the facts that the ratio of Bajaj Auto decision stands approved by the Supreme Court decision in the case of Escort Ltd. referred supra, we are of the view that the Alpha Lavan is no longer good law. 6. In view of the foregoing, we answer the reference in favour of the assessee. The papers may be placed before the original Bench for passing the appropriate orders. (e) Happy Forging Ltd. 5. Learned counsel for the appellant submits that Cenvat Credit has been availed by the assessee in violation of Rule 6(1) of the Rules and the adjudicating authority was not justified in dropping the proceedings. The Commissioner (Appeals) as well as the Tribunal erred in upholding the view taken by the adjudicating authority. Reliance has also been placed on judgment of the Honble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput was plaster of Paris, the intermediate product was moulds made out of the plaster of Paris, the final product was sanitaryware. In our view, the facts of that case are identical to the facts of the present case. The ratio laid down therein fully applies to this case. 11. In this view of the matter, we set aside the impugned judgment and the order of the Commissioner of Central Excise. It is held that the appellants will be entitled to MODVAT credit on duties paid for the inputs used for manufacture of parts, so long as the parts are used in the manufacture of tractors on which duty is paid. We clarify that in respect of parts which are sold in the open market and/or used for manufacture of tractors on which no duty is paid, the benefit of Notification No. 217/86-CE dated 2-4-1986 may not be available. As regards the judgment of the Hon ble Supreme Court in Ballarpur Industries Ltd., therein the issue was not of effect of the notification dated 25.3.1986, which has been invoked in the present case. The said judgment is, thus, distinguishable. 8. No substantial question of law arises. The appeal is dismissed. (f) Welspunn India Ltd. 3. The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
